Property Valuation

The income capitalization approach to value is most commonly used for which type of Illinois property?

ASingle-family residences
BRaw agricultural land
CIncome-producing commercial or investment properties✓ Correct
DOwner-occupied condominiums

Explanation

The income capitalization approach estimates value based on the property's ability to generate income (Net Operating Income ÷ Cap Rate = Value). It is most appropriate for income-producing properties such as apartment buildings, office buildings, retail centers, and industrial properties. For single-family residences, the sales comparison approach is typically preferred.

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